During a workshop Tuesday, board members gave tentative approval to a policy requiring the district to work to maintain a balance of 5 percent of the general fund budget. The state requires a fund balance of no less than 3 percent. The district doesn't have its own policy.

Superintendent Lori Romano spoke forcefully for the safeguard.

"It is the fiscally responsible thing for a board to do," Romano said.

During a brief presentation, Hernando school officials said the new policy would enhance the long-term financial integrity of the district and create better cash flow, as well as ensure more stability in an economic downturn. It would provide more money should an emergency occur and help maintain strong bond ratings.

The specific policy says the School Board "shall endeavor to maintain its target operating fund balance at 5 percent." If the budgeted ending fund balance falls below that target, the superintendent would be required to develop a plan to reach that level.

The district has a projected operating fund balance of 3.21 percent, which equates to roughly $4.85 million. To reach a fund balance of 5 percent, the district would need roughly $7.5 million, said the district's chief financial officer, George Gall.

Board Chairman Matt Foreman asked if the 5 percent goal was possible since the district had not been at that level before.

"I think it is very realistic," Romano said, noting that the district isn't quite there yet. "We need to value and honor and believe that this is the right thing to do to protect our employees and our positions."

Board member Cynthia Moore agreed.

"We need to have that money available," Moore said. "We're responsible for teachers, paraprofessionals, technical-support people. We need to think about what would happen if something tragic happened."

Board member Dianne Bonfield recalled the "scary" times when the district dipped below a 3 percent fund balance.

"I think it's pretty aggressive, but I do think it's forward-looking," Bonfield said. "I'm on board. I'm very curious about how we get there."

Danny Valentine can be reached at dvalentine@tampabay.com or (352) 848-1432. On Twitter: @HernandoTimes.